5 Tips to Consider Before Starting an E-commerce Business in UAE

UAE is one of the top emerging countries that actively promote the e-commerce trading platform. UAE despite having only one-third of the population managed to outperform Saudi Arabia by having an e-commerce market value of over US$10 billion. A recent Mastercard study found that 73 percent of UAE consumers are shopping more online than they did before the pandemic. Get more stats about the study here.

Recently, the Dubai government launched the Dubai E-Commerce Strategy with the aim of solidifying the city as a global logistics hub for the Middle East and increasing its share of the local economy to AED12 billion (approx. US$3.2 billion) by 2023.

With 100% ownership of your business and tax exemptions, this looks like the perfect time and opportunity to start your eCommerce brand in the UAE.

It’s relatively easy for you to start and manage your E-commerce business if you choose your business set up properly. Since there are numerous ways for you to get an eCommerce license in the UAE, finding the most reliable, and cost-effective business setup solution might be a time involving the issue.

Given below are 5 tips to consider before starting your E-commerce business in the UAE.

1. Choose E-Commerce packages wisely

We thought of putting this tip as number one since most people often get annoyed with E-Commerce packages. Most companies offer business start-up packages to attract or bait clients which only include the cost for your business license. Your residence visa and bank account opening cost will need to be settled separately. Further, to open a business bank account in the UAE, all the shareholders of the company should hold residence visas. So, it is a must for you to get a visa for all the investors of your company if you are planning to get a bank account. If you are choosing a business start-up package, make sure that you are clear about the cost involved for a residence visa and bank opening.

2. Select the most relevant activity for your business

In UAE you can hold three types of licenses (Commercial, Service, Industrial) and the license should be renewed every year. Once you choose the license type, the next step would be to select your business activities. If you are planning to cater to a specific business sector, then you can choose one of the business activities from the business activity list provided by the licensing authority. Check out the available business activities provided by the Department of Economic Development – Government of Dubai. If your plan is to cater to multiple business sectors you could go ahead with the most common activity called ‘General Trading’.

3. Choosing your Licensing Authority

Choosing the most reliable licensing Authority is one of the most important decisions to make in your business setup. In general, you could either choose a free zone authority where you can get 100% Ownership or choose a Dubai Mainland license where you must get a local sponsor with 51% ownership. The decision is entirely up to you since both have their pros and cons if you need more details about choosing the business structure contact our team and we would provide you with more information.

4. Choose a name for your Business

It is mandatory to take approval for the company name. Further, there is a certain limitation when naming a business. For an instance, you can’t use a service in your business name if you are getting a commercial license. You can check with the licensing authority for the name availability, or you could use the support of a service-providing company like us to get your name approval for your business.

5. Choose a facility for your business

If you go ahead with a free zone establishment you could get an already built facility from the licensing authority itself. You could choose from a wide range of spaces for an annual rent. Starting from virtual offices, shared offices, dedicated offices, customizable offices, warehouses, and many more. If you decided to go ahead with a mainland company, you may need to find a suitable office space separately.

Eagle Eye International has been a catalyst for the professional success of companies in the U.A.E. since its inception in the year 1998. With over decades of trusted excellence in incorporating businesses in the UAE, we could assist your business formation. Should you have any inquiries to set up your business in the UAE contact our team on +971 240 1778 and our team would be glad to assist you.